@AmyC
All that says is:
"Federal law requires the interest earned on federal bonds (U.S.
obligations) to be included in gross income. California does not
tax this interest income."
And for how to handle it:
"Enter the amount of federal bond interest
included in federal income on Schedule CA (540),
Part I or Schedule CA (540NR), Part II, Section A,
line 2, column B."
The Federal government considers AMD to be interest on US obligations when the AMD is from bonds held to maturity. The instructions do not handle this case.
Also, can ANYONE explain why Treasury Zero bonds which are always purchased below par do not show up as AMD on the 1099-B for the year the reached maturity and are redeemed?
